"The confidence level of India Inc has plummeted significantly during April-June quarter of 2013 as over 51 per cent of corporates feel that economic situation has further worsened in the previous quarter," it said.

"The current situation calls for urgent policy initiatives both by the Reserve Bank and the Centre to rescue Indian industry from further deterioration as it may significantly impact employment and consumer demand," the chamber said.

About 63 per cent of respondents feel that not much has changed in terms of the situation at industry level, as against about 44 per cent in the previous quarter.

Assocham said over 53 per cent of respondents seemed pessimistic and believed that economic situation is not likely to change during the course of next six months as against about 41 per cent in the previous quarter.

Corporates, it said, are also not optimistic about improvement in industry performance in the short horizon.

Majority of them foresees investment would remain at the same level.

"This indicates investors are less confident about investment climate, which is not a good sign for the economy," Assocham said.